When output is less than the economy's long-run capacity, which of the following is most likely to occur?
a. an abnormally low rate of unemployment
b. reductions in real interest rates and real resource prices
c. a sharp increase in imports
d. a government budget surplus
B
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Discount policy affects the money supply by affecting the volume of ________ and the ________
A) excess reserves; monetary base B) borrowed reserves; monetary base C) excess reserves; money multiplier D) borrowed reserves; money multiplier
Congress created the Federal Reserve System in 1913 as the institution delegated to administer
A) monetary policy to stabilize the economy. B) the constitutional power of Congress to "coin money and regulate the value thereof." C) collect taxes for the federal government. D) the minting of coins.
A rising average cost implies that
a. marginal cost is equal to average cost b. marginal cost is above average cost c. marginal cost is below average cost d. none of the above
The emergence of mortgage-backed securities provided mortgage brokers with an incentive to seek out only the most creditworthy borrowers
a. True b. False Indicate whether the statement is true or false